Is bitcoin a fiat currency?

The accuracy of this statement remains highly debatable. But generally speaking, Bitcoin is not a fiat currency because it has no central governing body, it’s deflationary, it’s not a physical piece of cash, and it has no nationality. It’s merely money in cyberspace that has garnered the reputation as being “digital gold.”

What is a bitcoin transaction?

Transactions - private keys. A transaction is a transfer of value between Bitcoin wallets that gets included in the block chain. Bitcoin wallets keep a secret piece of data called a private key or seed, which is used to sign transactions, providing a mathematical proof that they have come from the owner of the wallet.

Is bitcoin a wallet?

The term "wallet" is a bit misleading because Bitcoin's decentralized nature means it is never stored "in" a wallet, but rather distributed on a blockchain. Bitcoin is one of the first digital currencies to use peer-to-peer (P2P) technology to facilitate instant payments.

Is bitcoin a foreign currency?

Merchants often deposit and display prices in their local currency. In other cases, Bitcoin works similarly to a foreign currency. To get appropriate guidance regarding tax compliance for your own jurisdiction, you should contact a qualified accountant.